The Big Skinny Corporation’s registered office is in Cambridge. It has operations in various countries. The UK market for fashion and clothing has many players. The big names in the market include Big Skinny, Fred Perry, Ralph Lauren and Tommy Hilfiger. The market is characterized by rapidly evolving trends, and marked investments in innovation, research as well as development, which focus on user needs. The players in the market can extend their extant product ranges by investing in product research as well as development. Big Skinny’s position in the market is hinged on the capability of its unique products to offer solutions to extant fashion challenges, like the challenges associated with carrying bulky wallets. In this paper, PESTEL, SWOT, as well as Porter’s, analyses show the available means that Big Skinny can utilize to increase its market share within the UK and overseas. The analyses also show the related opportunities.
The Big Skinny Corporation’s registered office is in Cambridge, near Harvard Square. It is renowned especially for producing ultrathin wallets (Edelman & Kominers 2012, pp.1-2). It characterizes the wallets it produces as skinny. It has remained highly innovative in revolutionizing the production of wallets. It projects its wallets as representing a marked departure from the traditional wallets, which are rather clunky. Big Skinny remains awake to the effects of globalization, especially regarding new trends in the global market. The expansion of prospective markets and globalization are certainly the dominant trends driving the international economy presently. In the days ahead, more and more commercial opportunities will emerge in entirely new along with established markets according to Baines, Fill and Page (2012).
The opportunities will be characterized by particular needs that will require to be filled. The establishment of new businesses and the re-engineering of existing ones are aimed at satisfying given needs in particular markets. In the future, businesses can grow by offering solutions to extant problems, like the challenges associated with carrying bulky wallets. Presently, Big Skinny produces and markets passport holders, diverse wallets, card cases, card holders, polos, t-shirts, shirts, cell phone holders, apparel accessories, sweat shirts, and identification holders. As well, it produces and markets purses, billfold inserts, bags, magnetic money clips, and hats.
Environmental Analysis of Big Skinny
Environmental analyses are helpful strategic tools, or processes. They help businesses make the internal along with external elements that may influence their performances. The analyses are later on considered in decision-formulation processes. The PESTLE appraisal is one of the commonly utilized comprehensive environmental analyses. The appraisal provides helpful insights into business conduct. The appraisal is utilized by strategy formulators and managers in establishing the present positions of their markets. It equips managers with assistive information on the political (P) issues, economic (E) factors, social (S) concerns, technological (T) advance, legal (L) matters, and environmental (E) issues impacting on their organizations (Afsheenjafry 2012, pp.3-5).
A given country’s political issues, or factors, affect the businesses within it. Most of the Big Skinny’s operations are based within the UK. Thus, the day-to-day political dynamics of the country affect the operations and related outcome. The UK’s political climate is rather stable and democratic. All businesses and individuals within the country are free to associate with others and enjoy many other legally-guaranteed rights. The UK government has put in place laws that limit business monopolies by deregulating the business environment. As well, the government has entered into diverse international trade agreements, which presents Big Skinny with the possibility of establishing operations in other countries where it can source the requisite raw materials as well as labor economically.
Economic factors entail every determinant of a given economy along with the economy’s state. Such factors influence the directions taken by the economies they define. Some of the factors are inflation and interest rates; buyers’ disposable income; and accessibility of credit according to Baines, Fill and Page (2012). The recent economic downturn has affected Big Skinny’s profitability in recent years. International along with local economic circumstances affects its revenues. The government has put in place fiscal policies aimed at fostering profitable commercial environments across the country.
The social concerns, or factors, that affect businesses include the attendant social attitudes that have a bearing on given organizations’ sales. Such factors relate to cultures, gender, lifestyles, domestic structures, and wealth distribution, among others. In the UK, thin wallets are seen as socially appealing. That means that Big Skinny’s domestic market favors its products, especially the thin wallets. The country as well has many people now using electronic cards to make virtually all their payments. They find it convenient to store the cards in their wallets when not using them.
Technology keeps on evolving. The evolution of technology presents businesses with varied opportunities. For instance, Big Skinny has leveraged on various technological resources, including social media platforms, to market its products (Edelman & Kominers 2012, p.4). Notably, technological changes remain a considerable driver of the competition faced by the organization. The technologies used by organizations make them appealing to consumers if they come off as sustainable. Big Skinny should focus on enhancing efficacy in its production processes via their continued automation. It should execute wide-ranging research into how it can exploit emerging technologies to build and grow different competitive advantages (Wensley 1995, pp.63-72).
Every business, including Big Skinny, has challenges in adhering to the applicable laws. In the case of Big Skinny, the laws include occupation laws, staff safety along with health laws, antitrust laws, anti-discrimination law, and various municipal by-laws. The laws indirectly or straightforwardly impact on Big Skinny’s operations and the related costs. Big Skinny has instituted a detailed corporate compliance scheme, aimed at making certain that its management along with employees meet all the applicable legal requirements in the execution of their mandates. The company expects the management along with employees to conduct themselves with truthfulness and conscientiously.
The environment within which business runs its operations influences them and its profitability according to Collins (2014a) and Collins (2014b). The environmental factors that impact on businesses include their geographical settings, weather, waste disposal statutes, and regulations of energy utilization according to Baines, Fill and Page (2012). Given that Big Skinny retails hats, polos, t-shirts, shirts, and sweat shirts, it should consider the types of apparels its sells in diverse weathers. For instance, in winter, it should make the apparels using heavy, warm fabrics. The company should be keen on producing and marketing ecologically friendly products to have consumers take it environmentally responsible and appealing.
Big Skinny has various strengths (S) along with weaknesses (W). It has various opportunities (O) open to it. As well, it is faced with a major threat (T), competition. Its main strength is that it has a strong management. The management can assist exploit its entire potential, strengths, including its high pricing power. As well, the management can assist it effectively address its weaknesses, take advantage of the opportunities available to it, and eliminate the possible threats, or risks. The company has a marked pricing power, which portends that it can alter its pricing regime even upwards without losing clients (Koenigsberg, Muller & Vilcassim, 2004). It can review its products’ prices upwards without lessening demand for them. The power is hinged on the actuality that its products are unique or have limited competitors.
Another strength that Big Skinny enjoys is that it has an innovative culture that assists it generate unique products meeting unique client needs. Its culture is innovative since it recruits creative staff members from diverse educational and occupational backgrounds. The diversity of their experiences supports the development of the culture. Big Skinny generates unique products, which are one of its key strengths. The products assist in differentiating it from its business rival. As well, the uniqueness of its products allows it to sell them at high prices without depressing demand for them.
Big Skinny has one weakness: its reputation is rather negative. Many of its customers who are dissatisfied express their misgivings with it on social media. Some of the customers complain that the items they order from the company are not found in stock. Commonly, the items are indicated as being in stock on the company’s website while they are indeed not in stock. Others complain that their orders get stuck for long. At times, the company sends out postcards and emails with apologies to customers and communication of new delivery dates. Such dates are rarely fulfilled. Some customers complain that the company sends them the wrong items. Others complain that the wallets produced by the company have rubber logos that are considerably bulky, not matching with the classic, thin appearance of the wallets at all. Some customers take the pricing regime of the company as rather inflated compared to those of its business rivals. In some instances, the coupons issued by the company to its customers are incapable of being used to make purchases, even when their expiry dates are not yet (Edelman & Kominers 2012, p.6).
There are diverse opportunities open to Big Skinny. The first opportunity is innovation. Increased innovation can assist Big Skinny generate more and more unique products, designed to meet specific consumer needs. The second opportunity is the online market available to Big Skinny. The market presents the company with openings to markedly expand its operations. The third opportunity is new markets. Such markets permit the company to not only expand the operations but also facilitate the further diversification of its products’ portfolio. The other opportunity is that there is a growing demand for trendy wallets and clothes globally.
As noted earlier, Big Skinny is faced with a major threat, competition. Its competitors include Fred Perry, Ralph Lauren along with Tommy Hilfiger. As well, the company faces circumlocutory competition from companies like Nike along with Adidas. Nike along with Adidas has in recent years introduced highly fashionable line of clothes.
Porter’s appraisal is done to determine the degree of competition in given industries as well as in the development of business strategies. Five distinct forces are evaluated to establish an industry’s competitive intensity along with the industry’s attractiveness, or profitability. An industry is deemed unattractive if the five forces, as expressed in it, depress its general profitability. Industries that are defined by pure competition are the most unattractive. In this section, the forces are explored as they relate to Big Skinny.
The first of the forces is client bargaining power. In all fashion industries, clients have marked bargaining power since they can easily switch stores at minimal costs. For instance, when a consumer is dissatisfied with a store’s range of wallets, he or she almost always walks into the next store stocking wallets. Therefore, Big Skinny should offer the consumers who walk into its stores the best with regard to trendiness, fashionableness, innovativeness, price along with quality to retain them.
The second of the forces is the bargaining power of suppliers according to Baines, Fill and Page (2012). Big Skinny obtains most of its products from diverse suppliers. The suppliers design or style the products based on the instructions given to them by Big Skinny. Given that that there are many entities who can supply the products, they have limited bargaining power. Consequently, they charge low prices to stem the probability of having their contracts won by their business rivals. The rivals may offer to deliver on the contracts’ terms at lower costs. The continuing liberalization of trade globally has further and further eroded the bargaining power enjoyed by suppliers.
The third of the forces is the competition presented by new entrants to Big Skinny’s market. Notably, the market, like other fashion markets, has rather high entry barriers. Thus, Big Skinny should strive hard to have marked brand recognition owing to the associated limited switching costs. By having brands that are highly recognized, Big Skinny will add to the challenges that businesses that are keen on entering its extant market will face. As well, Big Skinny will ensure that incoming brands do not outdo its established brands. Notably, in fashion industries, consumers are highly likely to be loyal to companies that offer brands that take as highly likeable.
The fourth of the forces is substitute products. Big Skinny operates in an industry in which there are limited alternative ways to purchasing designer items from fashion stores. Thus, the industry is defined by weak competition from rival products. With regard to wallets, the most ordinary substitutes are making them by hand or getting used ones from close friends or one’s family. These two options are unappealing owing to the attendant time requirements and disparities in individuals’ preferences along with tastes.
The last of the forces is the competition posed by rivals. The fashion industry is markedly fragmented. Small establishments easily find room in the industry. The emergence of novel trends adds to the industry’s extreme dynamism. Given that clients have numerous options of stores from which they can purchase the clothing they desire, the associated switching costs are limited. Thus, it is essential that Big Skinny remains keen on and adapts to emerging trends to remain appealing to clients and grow brand loyalty.
Segmentation, Targeting and Positioning (STP) Process
Theoretical Explanation of STP
As a concept, the STP course, or process, is an essential marketing application. It shows the connections between how an organization elects to compete within a given market and the market’s dynamics. The task that is executed first in the process is segmentation. That is followed by the choosing of a single or multiple target markets. Lastly, product positioning in the target markets is implemented. Essentially, the process is aimed at guiding organizations to the creation, as well as implementation, of suitable market mixes (Campbell 1931, p.91).
The segmentation of a given market is the splitting of the market to result to smaller customer groups with comparable product requirements or defining attributes in order to choose suitable target markets. Targeting, which is also defined as the selection of target markets, entails the proactive choosing of proper market segments. It is aimed at training the focus of businesses’ marketing activities along with offers towards the segments. Each of the segments has consumers or clients with comparable product requirements or specific defining attributes. Product positioning refers to how the targeted segments perceive the principal benefits, as well as attributes, of offered products in relation to competing product offerings according to Baines, Fill and Page (2012).
There are various models used in promoting the appreciation of the process. The basic, or introductory model, merely highlights the principal components of the process: segmentation, followed by targeting and then positioning. The three components are aimed at attaining the fourth component of the process: proper marketing mixes. The model gives a simplified understanding of the process. Even then, it is not clear on the smaller steps that constitute the process as well. Ideally, the steps should be appreciated as well. When the smaller steps are included in the basic model, a detailed STP model emerges. The model has numerous elements.
First, a market is defined by a given organization. Second, the organization develops viable market segments. Third, the organization appraises each of the segments using defined criteria. Fourth, the organization chooses its target markets accordingly. Fifth, the organization appraises the profitability, or attractiveness, of each of the segments. Sixth, the organization develops segment profiles. Seventh, the organization constructs appropriate positioning approaches, or strategies. Eighth, the organization develops, as well as puts into action, proper market mixes. Lastly, the organization reviews own performance (Campbell 1931, p.91).
With respect to segmentation, the ensuing segments are only helpful when they are measurable, profitable, accessible, and unique, or distinct. Segmentation is aimed at finding profitable, or attractive, markets. It can be achieved via various means. First, segmentation can be attained through the breaking down of given markets into small components. Second, it can be attained by regrouping diverse, extant market segments. Third, it can be attained through the selection of the segments to focus on, or target.
Positioning, a critical skill in marketing, is done through the use of perceptual, or positioning, maps. Such maps are employed in determining appropriate positions for given products, ideas, persons, firms, or services. Such maps have different complexity levels. Regardless of their complexity, they remain marketing tools that are markedly effective. The positioning theory can be understood as the science defining perceptual, or positioning, strategies. The theory stipulates that effective strategies are only conceptualized in consumers’ minds as opposed to marketplaces. Position is applicable at every competition level: product, category, corporate, and industry levels as shown by Kotler and Keller (2006). Targeting is aimed at ensuring that given products reach the viable markets. When targeting, marketers of given products make various considerations. First, they consider the size of the population that utilizes the product. Second, the marketers consider their brands’ market share. Third, they consider how their brands compete with rival brands. Fourth, they consider their product class’ demographic profiles. Lastly, the marketers consider the media platforms that can be used in reaching out to the consumers matching the profiles.
Big Skinny’s Most Viable Market Segments
As noted earlier, the segmentation of a given market is the splitting of the market to result to smaller customer groups with comparable product requirements or defining attributes in order to choose suitable target markets (Gupta & Lehmann 2005). As well, as noted earlier, the resulting segments are only helpful when they are measurable, profitable, accessible, and unique, or distinct. Segmentation is aimed at finding profitable, or attractive, markets. It can be achieved via various means (Campbell 1931, p.91). First, segmentation can be attained through the breaking down of given markets into small components. Second, it can be attained by regrouping diverse, extant market segments. Third, it can be attained through the selection of the segments to focus on, or target.
There are various forms of market segmentation. Each of them is based on specific market attributes, including geographical spread and location, demographic characteristics, behaviors, psychographic attributes, seasonality, related benefits, and characteristic cultural values (Euromonitor 2013). In the present case, with respect to Big Skinny’s marketing process, demographic segmentation was done. Demographic segmentation is hinged on variables like education level, occupation, gender along with age. In some cases, demographic segmentation is hinged on the benefits that given products are expected to provide. Normally, such benefits are taken differently based on the phases given consumers are in within the products’ life cycles. The segmentation leads to the fragmentation of given markets into diverse life stage categories. As well, it supports the appropriate tailoring of marketing messages.
With respect to Big Skinny’s marketing process, the segmentation allows for the close appreciation of the users of its products. It allows for the close identification, as well as understanding, of the users’ needs, rates of using the products as well as wants. A company that is keen on understanding its customers’ needs, rates of using given products, as well as wants, divides the customers into categories using variables like family or race lifecycles, religion, gender, social class, income level or age (Reid & Bojanic 2009, p.139). That ensures that the company gets vast secondary data, which it can use in informing how it divides the available market based on the variables. With respect to Big Skinny’s marketing process, a demographic segmentation survey showed that the most viable market segments for the company’s products are college-going students aged between 15 and 23 and young executives aged between 30 and 40. The survey used in the segmentation focused on seven criteria: age, internet usage, income, life style, occupation, location, and price sensitivity.
The sizes of the two segments are sufficiently large to make them worth pursuing by Big Skinny. The segments are expected to expand over time as populations grow. That means that Big Skinny is set to draw more and more profits from them from making increasing sales. Big Skinny faces considerably limited competition in the segments, making them quite attractive. The customers in the segments are located near Big Skinny stores or access the stores via online platforms, which reduce the costs the company incurs to reach them. Both segments are compatible with the goals of Big Skinny.
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